Free trade pact to spearhead Africa’s economic growth

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From Mthulisi Sibanda in Sun City, South Africa

A technology executive has forecast the African
Continental Free Trade Area (AfCFTA) to result in massive economic
growth and help alleviate poverty in the continent.
Carel Coetzee, the chief executive officer of NEC XON, highlighted the
prominent role that technology would play in the impact of the trade
agreement endorsed by a majority of African countries.
In an interview with CAJ News Africa at the company’s annual Pan-African
summit in Sun City, North West province, Coetzee said the resultant
growth in intra-African trade would save African economies vast
financial resources on imports.
“AfCFTA will by 2050 be the highest contributor to growth and poverty
alleviation in Africa,” the executive projected.
“With AfCFTA, there will be lower tariffs on goods produced among those
54 Africa countries,” he said on the impact of the trade agreement only
Eritrea has not signed.
“That means, for example if, a product is produced in Mozambique and
they supply it to Angola, there will be lower tax input on it, which
means there will be an incentive to produce on the continent,” Coetzee
explained.
“That creates some incentive for member countries to start producing
locally and stop importing everything. When we produce locally, we can
sell it cheaper. Then we can compete better within the AfCFTA,” he
continued.
The executive added that the continent will also benefit in terms of
organisations from outside the continent investing in manufacturing
facilities to produce goods within the AfCFTA.
“Ultimately because of that, we charge lower import duties by the
receiving countries, which means we will grow trade among us (Africa).”
Coetzee said technology would play a vital role in the projected
growth, particularly around the production of goods and financial
transactions among the African countries.
“This is a massive opportunity for all of us.”
In his keynote presentation at the summit themed “Orchestrating a
Brighter World”, he mentioned that Africa was lagging behind other blocs in
intra-continental trade, with 15 percent.
Comparatively, the figure is 67 percent for Europe, 58 percent for Asia
and 48 percent for North America.

According to experts, non-tariff barriers, including uncoordinated
bureaucratic procedures, long waiting times at borders or lengthy and
cumbersome export requirements hinder trade within Africa.
AfCFTA is hailed as one of the largest free trade areas since the
formation of the World Trade Organisation in the mid-1990s.
This is given Africa’s current population of 1,2 billion people, which
is expected to grow to 2,5 billion by 2050.

– CAJ News

 

 

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